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GAO: IRS website redesign plan needs work

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The number of searches on the Internal Revenue Service's website was up significantly in the 2011 tax filing year, even though web traffic did not experience a similar spike, finds the Government Accountability Office.

Web analytics indicate taxpayers are having trouble locating the information they need, IRS officials told auditors in a report (.pdf) dated Dec. 15, 2011 but not released publicly until Jan. 17. The IRS website had 250 million visits in the 2011 tax season and 312 million searches; a search increase from 239 million visits and 277 million searches in 2010, and 235 million visits and 263 million searches in 2009, according to the report.

The IRS has begun a 10-year, $320 million investment in a website overhaul, but GAO says the planned online self-service tools don't include allowing taxpayers access to account information. The IRS.gov redesign also lacks a justification for new services and time frames, say report authors.

GAO recommends the IRS commissioner complete an Internet strategy that provides justifications for online self-service tools, allow a taxpayers to access and update elements of their account online, acknowledges the cost and benefits to taxpayers of new online services, sets project timelines and milestones and includes a plan to update the strategy periodically. IRS agreed with GAO's recommendations.

The report says a better website is important because it will reduces costly phone calls. While the growth of e-filing has improved service to taxpayers, phone assistance at IRS is continues to be a weak point. The number of phone calls, 83 million in filing year 2011, has increased due to recent tax law changes aimed at stimulating the economy and IRS is "overwhelmed," said report author James White, GAO's director of strategic issues in a podcast.

"There IRS has some problems. They have a tremendous volume of telephone calls," said White.

However, there was a jump in e-filing in 2011, which is helping alleviate pressure on IRS. E-filing increased about 13 percent over the previous year, said White, to nearly 80 percent of the 140 million individual returns filed.

"It enables IRS to process the returns much faster. It's much cheaper to process. It costs them about 17 cents to process a return that's e-filed and it's over $3.50 to process one that comes in on paper. But importantly for taxpayers, e-filed returns have fewer mistakes," said White.

But given the increase in e-filing and improved processing performance overall at IRS, the agency needs to update its refund timeliness measure and goals, recommends the GAO report. The measure only relates to the 22 percent of returns filed on paper, with the goal of issuing a refund in 40 days. "In 2012, IRS expects to issue most refunds within 4 to 6 days of processing a return (paper and e-filed), meaning the current goal does not reflect current performance and capabilities," says the report. IRS agreed with GAO's recommendation to update its goals.

For more:
- download the report, GAO-12-176 (.pdf)
- listen to the GAO podcast

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